WH Smith buoyed by travel as high street sales take hit

WH Smith expects that full-year trading will be in line with expectations in FY22, as a rebound in its travel business helped mitigate weaker sales across the high street. 

Total revenue surpassed 2019 levels at 112% in the half-year ended 27 August 2022, while Travel was “comfortably in excess of pre-Covid levels” at 129% as passenger levels recovered in key travel markets.

Nonetheless, high street sales in the second half were adversely impacted after its online greeting card business, funkypigeon.com, was disrupted following a cyber attack in the period. 

The event was in part accountable for high street sales being 80% of 2019 revenue for the half-year to 27 August 2022, though this was in line with expectations.

The group said it will “continue to focus on cost efficiencies” and a return on space in its high street business, having identified further significant cost saving opportunities, most notably through reductions in rent.

Overall, the group said UK business was performing strongly and similarly North America “continues to show good momentum”. Sales in the Rest of the World were reportedly slower to recover, but the group is now seeing good growth across all markets.

In addition, the group said it continues to make good progress with its store opening programme and “remains in a strong position to benefit from the significant growth opportunities across the global travel retail market”. 

It has over 130 stores won and yet to open with a number of ongoing tenders across its markets. More recently, it won a further six new stores in Brussels airport with further significant wins in North America including at Salt Lake City and Los Angeles International airports. 

The group said these new store wins “demonstrate the capability of the business to win new stores across different formats in a range of geographies”.